HomeMy WebLinkAbout99-1003 ChiavettaDear Ms. Chiavetta:
1999.
I. ISSUE:
OPINION OF THE COMMISSION
Before: Daneen E. Reese, Chair
Austin M. Lee, Vice Chair
Julius Uehlein
Louis W. Fryman
John J. Bolger
Frank M. Brown
Susan Mosites Bicket
DATE DECIDED: 8/30/99
DATE MAILED: 9/14/99
99 -1003
Rosemary Chiavetta, Esquire
Kingwood Consulting Group, Inc.
APC Building, Suite 303
800 N. Third Street
Harrisburg, PA 17102
Re: Lobbying, Lobbyist, Attorney, Confidentiality, Communications, Fee, Expense,
State Official, Friend, Social Event, Registration, Client.
This Opinion is issued in response to your advisory request received on July 29,
Whether an attorney, who provides legal counsel to clients on matters which may
include issues related to legislation and government action and who contacts state officials
who are friends on an entirely social basis, is engaged in lobbying.
II. FACTUAL BASIS FOR DETERMINATION:
You are in house legal counsel" for the Kingwood Consulting Group (Firm) which is
based in Columbus, Ohio. You are the only employee in the Harrisburg branch office.
You do not act as lobbyist, but rather as legal counsel to clients on various issues, some of
which are related to legislation and government actions. You advise clients on strategies
and other actions in order for them to deal with state government. After you accepted this
position in April, 1999, you did not register as a lobbyist because you were not hired to
lobby.
In attending one of the training seminars of this Commission on the Lobbying
Disclosure Act (Act), you posed the following question about providing strategic advice to
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clients: "What if a client, whom you refer to as the "principal ", hires an attorney to act as an
attorney and not as a lobbyist ?" You state that one response by a Commission staff
member was that such advice would not be considered action relevant to the Act but the
response from another staff member was that because the advice concerned government
action, the client or principal would have to report the fee paid to the attorney. You believe
that fee arrangements between attorneys and clients are confidential. You request
clarification on this point.
Your second inquiry concerns entertainment. Prior to your current position, you
were an employee of the Commonwealth for 20 years, first in the Pennsylvania House of
Representatives and then in the Public Utility Commission. As a result, you have many
friends on Capitol Hill, some of whom you have known for 20 years. Many of your friends
are now elected or appointed officials whom you still see frequently on a social basis. You
inquire if your entertainment of these officials who are also friends would constitute
"lobbying" and thus require registration. If the official pays his or her own way, you ask
whether the result would be any different. You state that it would be unfortunate if the new
law imposes a burden upon people to treat such friendships as business transactions just
because the friends are state officials and you are now in the private sector.
By letter dated August 9, 1999, you were notified of the date, time, and location of
the public meeting at which your request for an Opinion was to be considered.
At the public meeting on August 30, 1999, you appeared and offered commentary,
which may be fairly summarized as follows.
The Firm provides clients with strategies and advice on issues such as mergers and
acquisitions. In its consulting work involving government relations, the Firm advises clients
as to how to deal with matters but does not necessarily lobby.
Although you do not take issue with registering as a lobbyist if you meet the
threshold, you raise the concern about issues of pro- ration and the disclosure of
information as to a law client. You reference 51 Pa. Code 35.1 (g)(3)(iv) involving the
exclusion as to privileged communications between an attorney and client.
As to the entertainment of friends, some of whom are state officials /employees, you
acknowledge that on some occasions, but not always, you receive reimbursement for such
entertainment expenses.
III. DISCUSSION: It is initially noted that pursuant to Section 1308(c) of the Act in
conjunction with Sections 7(10) and 7(11) of the Ethics Act, 65 P.S. § §1107(10), (11),
advisories are issued to the requestor based upon the facts which the requestor has
submitted. This Commission does not engage in an independent investigation of the facts,
nor does it speculate as to facts which have not been submitted, in issuing advisories. It is
the burden of the requestor to truthfully disclose all of the material facts relevant to the
inquiry. An advisory only affords a defense to the extent the requestor has truthfully
disclosed all of the material facts.
In order to decide the issues which you have raised, this Commission must review
the pertinent definitions and substantive provisions of the Act and related Regulations.
Section 1303 of the Act defines "lobbying" as follows:
"Lobbying." An effort to influence legislative action or administrative
action. The term includes:
(1) providing any gift, entertainment, meal, transportation or lodging
to a State official or employee for the purpose of advancing the
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interest of the lobbyist or principal; and
(2) direct or indirect communication.
65 Pa.C.S. §1303.
The key terms " legislative action," "administrative action," "direct communication,"
and "indirect communication" that are within the definition of "lobbying" are themselves
defined as follows:
"Legislative action." An action taken by a State official or
employee involving the preparation, research, drafting, introduction,
consideration, modification, amendment, approval, passage,
enactment, tabling, postponement, defeat or rejection of legislation;
legislative motions; overriding or sustaining a veto by the Governor;
or confirmation of appointments by the Governor or of appointments
to public boards or commissions by a member of the General
Assembly.
"Administrative action." Any of the following:
(1) An agency's:
(1) proposal, consideration, promulgation or rescission
of a regulation;
(ii) development or modification of a guideline or a
statement of policy; or
(iii) approval or rejection of a regulation.
(2) The review, revision, approval or disapproval of a regulation
under the act of June 25, 1982 (P.L.633, No.181), known as the
Regulatory Review Act.
(3) The Governor's approval or veto of legislation.
(4) The nomination or appointment of an individual as an officer or
employee of the Commonwealth.
(5) The proposal, consideration, promulgation or rescission of an
executive order.
"Direct communication." An effort, whether written, oral or by any
other medium, made by a lobbyist or principal, directed to a State
official or employee, the purpose or foreseeable effect of which is to
influence legislative action or administrative action.
"Indirect communication." An effort, whether written, oral
or by any other medium, to encourage others, including the
general public, to take action, the purpose or foreseeable
effect of which is to directly influence legislative action or
administrative action. The term includes letter- writing
campaigns, mailings, telephone banks, print and electronic
media advertising, billboards, publications and educational
campaigns on public issues. The term does not include
regularly published periodic newsletters primarily designed for
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and distributed to members of a bona fide association or
charitable or fraternal nonprofit corporation.
65 Pa.C.S. 1303.
The term "lobbyist" is defined in the statute as follows:
"Lobbyist" Any individual, firm, association, corporation,
partnership, business trust or business entity that engages in
lobbying on behalf of a principal for economic consideration. The
term includes an attorney who engages in lobbying.
Id.
You seek an advisory as to two areas of inquiry.
The first area of inquiry concerns your role as in -house legal counsel for Kingwood
Consulting Group. You have factually stated that you do not act as a lobbyist but as an
attorney providing legal advice to clients on matters, some of which relate to legislative
and government actions. You note a comment by our staff that fees for legal advice
relating to lobbying would have to be reported as "lobbying- related expenses" by the
principal, your client.
In response to your first inquiry, we consider the practice of law and the activity of
lobbying to be mutually exclusive. You have submitted as fact that in advising your clients,
you act solely as an attorney providing legal advice. In providing legal advice to your
clients, you would not be engaged in lobbying. We would also note, parenthetically, that
discussions between lobbyists and their principals would not, in our view, constitute
lobbying.
However, to the extent that you would advise a client required to register /report
under the Act on lobbying - related matters, your fees would be reportable within the "single
aggregate good faith estimate of the total amount spent for personnel and office expenses
related to lobbying." That category includes numerous items which are not themselves
"lobbying" but which, like your fees, are lobbying - related. The General Assembly's intent
to include such costs is evidenced by the following statutory language:
. . . Reportable personnel costs include costs for lobbying staff, research and
monitoring staff, consultants, lawyers, lobbyists, publications and public relations
staff, technical staff and clerical and administrative support staff who engage in
lobbying but are exempt from reporting under section 1306(6) ... .
65 Pa.C.S. §1305(b)(2)(i). (Emphasis added). The reporting under this category would
consist of a single, "grand- total" estimated figure, which would not identify you, your fee, or
the nature of your fee specifically. Further, the Act would not require the divulgence of
conversations either in terms of participants or content. See, 51 Pa. Code 35.1(g)(3).
Your second area of inquiry relates to your entertaining state officials whom you
have known for years and consider to be friends. As noted in Cook, Opinion No. 99 -1001,
we consider the giving of gifts to state officials and employees by a principal to inherently
be for the purpose of advancing the interests of the principal and within the definition of
"lobbying." Id. See, §1105(b)(6) of the Ethics Act which provides that gifts from registered
lobbyists or their employees do not qualify for the reporting exemption for gifts from
"friends ". The same would be true of a principal or lobbyist providing hospitality to State
officials or employees.
To the extent that you would engage in purely social activities and conditioned upon
the assumption that you would not be receiving economic consideration for such social
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activities, you would not be considered a lobbyist as defined by the Act. To the extent that
you would be socializing with such state officials and employees for economic
consideration, even if in the form of reimbursement for such expenses, that activity would
constitute lobbying as that term is defined under the Act.
An individual who engages in some activities which constitute lobbying must
register within 10 days of exceeding the $2500 threshold under the Lobbying Disclosure
Act.
The propriety of the proposed conduct has only been addressed under the Act and
derivatively the Ethics Act to the extent applicable; the applicability of any other statute,
code, ordinance, regulation or other code of conduct has not been considered in that they
do not involve an interpretation of the Act.
IV. CONCLUSION: An individual who, in the practice of law, advises clients on
lobbying - related issues would not in so doing be engaged in lobbying. However, the
attorney's fees on lobbying - related matters would be lobbying - related expenses reportable
by the principal as part of the principal's "single aggregate good faith estimate of the total
amount spent for personnel and office expenses" under §1305(b)(2)(i) of the Lobbying
Disclosure Act.
Lobbying would include the giving of hospitality to state officials /employees by a
principal or lobbyist. An individual who engages in purely social activities and does not
receive economic consideration for such social activities would not be considered a
lobbyist under the Lobbying Disclosure Act.
An individual who engages in some activities which constitute lobbying must
register within 10 days of exceeding the $2500 threshold under the Lobbying Disclosure
Act.
Pursuant to Section 1308 of the Act, a requestor who truthfully discloses all material
facts in a request for an advisory and who acts in good faith based upon a written opinion
of the Commission issued to the requestor shall not be held liable for a violation of the
Lobbying Disclosure Act.
This opinion is a public record and will be made available as such.
Finally, a party may request this Commission to reconsider its Opinion. The
reconsideration request must be received at this Commission within thirty days of the
mailing date of this Opinion. The party requesting reconsideration must include a detailed
explanation of the reasons as to why reconsideration should be granted in conformity with
51 Pa. Code §39.1.
By the Commission,
Daneen E. Reese
Chair